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Comment by hnlmorg | Hacker News Reader

There is some sense in it and I’m surprised by all the naysayers here.

For starters, Quest is by far the biggest selling VR/XR headset. So he is already seeing some success here.

And as we’ve seen before, Facebook isn’t going to dominate forever. It makes complete sense throwing large sums of money at future technology while you still have large sums of money to burn.

Chasing new technology when you’re already behind and your revenue is decline is a guaranteed way to fail.

Moonshots like this you waste a tonne of money when that money is comparatively cheap anyway. Plus it keeps people talking about your business, which is never a bad thing.

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They have lost $68 billion (not spent, lost) on this project [0]. For that money they could have bought EA, owned its cash flows and still have $8 billion left over.

[0] https://www.ft.com/content/df26fc4c-5488-4994-b2b8-be4bfbda2...

> Chasing new technology when you’re already behind and your revenue is decline is a guaranteed way to fail.

> Moonshots like this you waste a tonne of money when that money is comparatively cheap anyway.

> not spent, lost

Can you explain that assertion in more detail?

What is there to expand on? The revenues from that division are $68 billion less than expenses it has racked up.

Zuck said from the beginning this was a long term bet. We can debate the wisdom of that call and its timescale but let's assume he thinks of it as a 20 year thing. Until that time period is up then surely it's "spent" rather than "lost"?

Do you know what the concept of time value of money means?

The further out into the future you go, the less valuable the returns are when taken back into the present.

The reality is, Mr Zuck is a manager who is there to invest the cash of its shareholders on their behalf into projects that beat the hurdle rate. Shareholders dont care abut how cool the tech is.

“Mr Zuck” is more than just a manager. He owns around 20% of the economic shares of Meta and more than 50% of the voting rights.

So he is acting on behalf of the shareholders because he is also the most important shareholder.

No he is a manager and is employed at the behest of the collective shareholders.

Zuck can exercise all his power, but he can also enjoy a low stock price if he pisses off investors. Hence that power doesnt mean much.

But, again, he is effectively the majority shareholder.

That power means literally everything. Facebook is his company in every sense of the term and if investors don’t like that then that’s their problem, not his.

And Apple loses 33 billion a year. Amazon 73 billion. Google 39 billion.

Critically, in my estimation: Facebook/Instagram is delivered on phones, browsers, and PCs not owned by Meta. Boardroom politics could tank huge chunks of their business model without recourse.

Meta establishing VR and the underlying ecosystem, building a moat, makes lots of long term sense (if they succeed).

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